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Benebit, one of this year’s most hyped ICOs, has pulled an exit scam, making off with a reported $2.7 million of investor funds. Other estimates put the figure as high as $4 million. The fraud only came to light after someone noticed that the team photos had been stolen from a school website. Once this happened, the Benebit team scampered, taking their ill-gotten gains with them. The case is believed to be the largest ICO exit scam to date.

Benebit was supposed to be creating a currency for customer loyalty. The ICO platform had wide support, with over 9,000 Telegram followers and a positive rating on ICO review sites. As soon as the scam surfaced, those sites wasted no time in scrubbing their reviews or updating them to reflect the change of circumstances, despite having previously green-lighted the project.

As of January 22, Benebit is no more: its site is gone and most of its social channels erased, save for Telegram, where bewildered investors are still performing a post-mortem. On paper, Benebit looked legit, having been active on Twitter for over a year and developed a sizeable community. Believers in the project had no hesitation in dipping into their pockets to fund the venture: one claims to have lost 14 BTC and another 300 ETH in the pre-ICO, which was only a day old.

A cached version of the Benebit website outlines the basics of the purported platform: the homepage is rich with buzzwords like “decentralized”, “global system”, “blockchain, technology”, and “disruptive network”. These aren’t in themselves cause for concern, for every ICO website is filled with similar fluff. One of the reasons why Benebit was regarded as being a legitimate project is on account of the extravagant sums spent on marketing. As much as $500,000 is believed to have been put towards promoting the project. If Benebit is confirmed to be an exit scam, it is an elaborate and well-orchestrated one. The incident unfolded on the same day that the SEC chairman warned about shady ICOs.

Another ICO investment site, ICO Watchlist, published an update on the situation, explaining: “Benebit was a Junior listed project on our platform and it has been pulled down since this report got to us. Our hearts go out to those who might have lost their funds to this project. As we consistently remind people, ICOs are high risk ventures and it is imperative that investors do their own due diligence before making commitments.”

ICO Bench had also listed Benebit on its site and the project had been given a user rating of 4.1 stars out of 5, only for the entry to be hastily deleted when the scam came to light. According to the Benebit Telegram channel’s admin, the true entities behind the project are based in India. He professes to have been as duped as everyone else, writing: “We were hired for community management. We had their ceo passport as proof of identity. Comes out it is also fake”.

After the Benebit site went offline and the first tremors started reverberating across social media, the Telegram channel filled with memes of pink wojaks and suicide prevention numbers. While some posters derived morbid humor from the situation, others were distraught. Although the blame for the scam lies firmly with its orchestrators, ICO review sites are also complicit for failing to perform due diligence. These supposed experts were supposed to be capable of sniffing out scams and promoting only genuine projects. As the maxim goes, do your own research and trust no one.

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